The three bombs that exploded amid the early evening bustle of Dahab last night were a sad testament to the Red sea resort's increasing popularity. For years, the town, with its beachfront restaurants, bazaar and numerous cheap diving and windsurfing companies, was a place that drew a younger, more independent crowd than its larger neighbour, Sharm el-Sheikh.

But Dahab has grown, and over the last year or so, the little Bedouin town has begun to shrug off its hippy image. It is also popular with Egyptian holidaymakers. The beach shacks now compete with the modern luxury hotels that are springing up along the coastline and Dahab is beginning to resemble Sharm el-Sheikh. This increasing lure could be why, shortly after 7 o'clock last night, Dahab found itself under attack, as bombs exploded in the Nelson and Aladdin restaurants and the Ghazala supermarket.

Owen Norris, an Australian tourist, was eating dinner at another restaurant close by when he heard the first bomb go off. "There was a mass explosion and we ran away, and then ran back to try and find friends," he told BBC News 24. "There were people running round with blood coming out of their faces."

The bombs went off one after the other with hardly any interval, he said, shattering the windows of surrounding shops and restaurants. "As we were running we heard the second two ... [They] were within 20ft of each other."

Khaled Eldiasty, who runs the Star of Dahab Mashraba hotel about 150 metres from the blasts, mistook the blasts for gas explosions. "They were not very loud - they were like gunshots," he said. "I thought it was gas pumps exploding, but then there was screaming and I went outside."

On the street, he was greeted with the sight of debris and bodies. "There was glass and wood everywhere. I saw bodies lying on the ground. Everyone was panicking."

Ellie Gough, a nanny from north London, was on holiday in the town with her friend Amy Jay. They thought the bombs were fireworks until they saw dozens of cars carrying wounded people pass by the window of her hotel.

"We were in our hotel room when we heard three massive bangs really close together," said Ms Gough, 22. "As first we thought they were just fireworks, but it was only a little while after when we saw dozens of people and cars with lots of injured people crammed inside heading towards the local hospital down the road."

Ms Gough said that most of the wounded were being transferred to Sharm el-Sheikh because the local hospital, which is more used to treating diving injuried, could not cope.

"Amy and I tried to get to the hospital to give blood as soon as we realised the scale of what had happened, but we were turned away. We will try to get back there tomorrow.

"There are a lot of British tourists staying in the town and at our hotel. There was a lot of confusion in the aftermath of the bombs, but all the British people at our hotel appear to be okay, thankfully."

She added: "A lot of local people appear to be injured or killed. we spoke to someone who managed to get back from the hospital. They were talking about 100 people dead and 400 people injured."

Jamie Gibbs, a British windsurf teacher who had gone to Dahab to work, said he and his co-workers had rushed to the scene when they heard the explosions. When they arrived, they saw the injured "being thrown into taxis, any vehicle".

He said he had only been working in the resort for a week, and it had "seemed really safe. It's completely out of the blue. It didn't seem like it was a target on western tourists because it's a holiday for Egyptians here at the moment.

He added: "From what we saw there were so many Egyptians injured compared to the tourists out here."

Mr Eldiasty said the bombs coincided with an important local holiday, the Freedom of Sinai. "Someone is not happy with Egypt and what we are doing," he said. "They are clearly not Egyptians."